Lionsgate rejects Icahn's amended tender offer
CEO says offer doesn't reflect value of Lionsgate sharesTORONTO -- Lionsgate has rejected activist shareholder Carl Icahn's $6-per-share hostile takeover bid.
Vancouver-based Lionsgate said its board of directors concluded Icahn's amended tender offer was "financially inadequate and coercive," and should be rejected by shareholders.
Shares in Lionsgate were up 3% in pre-market trading to $5.98 on the New York Stock Exchange on Tuesday, just below Icahn's $6.00 offer price for all of the company's outstanding common shares unveiled last week.
Lionsgate CEO Jon Feltheimer, based in Santa Monica, in a statement dismissed Icahn's amended tender offer as aiming to seize control of the indie studio without paying a control premium.
"We believe that nothing has changed -- the offer remains financially inadequate and still does not reflect the full value of Lionsgate shares," Feltheimer said in a statement.
A successful takeover will require a far higher offer price, Lionsgate said as it pointed to an average price target of Wall Street analysts for Lionsgate shares as of March 22 at a 46.3% premium to the $6.00 per-share offer now on the table.
The Lionsgate chief insisted the company would continue with its long-term strategy "to grow our portfolio of businesses."
Lionsgate placed a bid for MGM on Monday in a move that runs counter to Icahn's opposition to the studio pursuing expensive library catalogs.
The indie studio said Icahn had failed to outline a "clear strategy or vision" for Lionsgate, other than suggesting an Icahn regime would look to exploit the "consolidation of film and television distributors, as opposed to the acquisition of library assets."
Lionsgate also defended the poison pill defense it introduced last week to protect shareholder interests from "coercive or unfair attempts to take over the company without the consent of a majority of the non-bidding shareholders, and without affording all shareholders fair value for all of their shares."
Icahn, Lionsgate's second-largest shareholder with a 19% stake, has extended his latest offer for company shares to April 30.